In a major development for the crypto industry, the U.S. Securities and Exchange Commission (SEC) is reportedly preparing to withdraw its lawsuit against Coinbase.
The lawsuit, initially filed in 2023, was seen as a significant legal challenge for the exchange and the broader cryptocurrency sector. The decision follows a shift in SEC leadership under the Republican administration of President Donald Trump.
Regulatory Overhaul and Crypto Policy Shifts
The SEC has recently restructured its approach to crypto enforcement, forming a dedicated task force while rescinding key regulatory guidance.
The agency has also begun revisiting legal cases, prioritizing settlements over litigation. If the Coinbase lawsuit is dropped, it would mark the most substantial policy shift under the new leadership.
Industry and Market Reactions
Coinbase Chief Legal Officer Paul Grewal expressed optimism about the development, stating:
“The war against crypto, at least as it applies to Coinbase, is over.”
Following the news, Coinbase shares surged by more than 3.5%, reflecting investor confidence in the regulatory shift.
Controversy Surrounding the SEC’s Move
While some in the crypto industry welcome the decision, critics argue that dismissing the case is a misstep. Dennis Kelleher, CEO of Better Markets, stated:
“The SEC used to enforce the law without fear or favor but is now favoring the crypto industry and fearing billionaire crypto kingpins who are publicly belittling the agency.”
Meanwhile, SEC Commissioner Hester Peirce, known for her pro-crypto stance, has taken a leading role in reshaping the agency’s approach. The new administration’s focus on promoting digital assets aligns with Trump’s campaign promises to support cryptocurrency innovation.